Guide Bulgaria - Podcasts powered by Odiogo

The privatization of Municipal Bank turn out to be a political deal - it will come to light no sooner than next spring, just before the parliamentary elections. And it is not a secret that local businessman Hristo Kovachki holds over 25.6 pct in the bank trough 11 of his companies. Thus any key decision on the bank s destiny requires his consent. The shareholders of the bank need a majority of 75 pct plus one vote to approve a decision. But the Sofia municipality and its subsidiaries only hold a 74.4 pct stake. Hardly any foreign investor would agree to but the lender without being able to manage it. Thus Hristo Kovachki will have to either sell his stake or become the new majority owner of the bank. He is known to have ambitions to add a bank and an insurer to his empire. The Sofia municipal councilors will discuss at a closed session next month the report of the adviser of the privatization of Municipal Bank. The consortium Arji - Kambourov - Transacta - Moore Stephens Bulmar has assessed the bank and recommended a sell-of procedure. Source: Banker, P4 Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our Weekly Reports Enter your E-mail to receive our Daily Reports ShareThis

The average mortgage loan drawn in Bulgaria topped 46,300 euro in May, showed data of CreditCenter. It was 41,000 euro a month before. The increase is backed by consumers getting used to the higher interest rates and the rise in property prices in some areas. Source: Pari, P4 Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our Weekly Reports Enter your E-mail to receive our Daily Reports ShareThis

Bulgarian Banks are involved in a tight race for deposits not because they are short of money but because of high liquidity, said Corporate Commercial Banks board member and executive director Ivan Zafirov. Any bank owner expects their investments to develop. The preparation for three-year plans should start today, Zafirov explained. Source: Netinfo.bg (27/06) Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our Weekly Reports Enter your E-mail to receive our Daily Reports ShareThis

Bulgarians have taken the largest percentage of foreign-currency loans in the world, Erste Banks said in a report. Local experts say that euro-denominated loans are more popular than those in levs despite the higher price because the foreign currency in considered more stable. Lending in Bulgaria zoomed more than 80 pct in 2007 compared to 2006, according to the report. Companies have taken 77 pct loans. Further increases are expected this year. For instance, mortgage lending is seen up by a whopping 88 pct due to the construction boom and the relatively lucrative interest rates. Yet banks are expected to further tighten lending requirements and hike rates over the coming years. Source: Netinfo (27/06) Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our Weekly Reports Enter your E-mail to receive our Daily Reports ShareThis

The growth of the Bulgarian banking sector is fueled by increasing mortgage lending showed a report of research company RNCOS. Over one-third of the loans Bulgarian banks gave out in 2006 were spent on home purchases. Mortgage lending is seen swelling by 88 pct in the period 2007 to 2010. From 2004 to 2006 it surged 87 pct due to the market liberalization and the low interest rates, PR Minds explained. The Bulgarian housing sector has been thriving in the past years as banks offer numerous housing loan opportunities. The property sector generated over 40 pct of the foreign capital in Bulgaria. In 2007 it attracted 26 pct more investments then the previous year. The steady pace will keep up trough 2008 according to RNCOS. Source: Monitor(28/06), P9 Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our Weekly Reports Enter your E-mail to receive our Daily Reports ShareThis

The annual percentage rate (APR) on Bulgarian consumer loans has soared 11 pct to over 12 pct in the year to May 2008, the central bank said. Housing loans have grown costlier to 9.24 pct from 9.18 pct. The APR includes the loan interest rate as well as all types of fees and commissions. The interest rates on both household and corporate loans will continue the uptrend of recent months. The rates on new consumer loans have increased 0.96 percentage points to 10.77 pct. They have gained a respective 0.33 percentage points to 8.81 pct and 0.18 percentage points to 12.85 pct for housing and other loans. The respective interest rates on active loans have grown to 13.76 pct, 8.93 pct and 12.52 pct. The average interest rate on newly signed deposits with fixed maturity has surged to 5.05 pct, up 0.97 percentage points. This, however, is 0.19 percentage points down from April as the promotion aimed at attracting fresh resources ended. Experts say the trend has created a new phenomenon called banking tourism with customers migrating between bank with lucrative promotions. Source: Dnevnik, PIX Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our Weekly Reports Enter your E-mail to receive our Daily Reports ShareThis

Bulgarian Raiffeisenbank had given 1.63 bln levs worth of loans to small and medium companies by March 2008, up 64.6 pct year-on-year. The bank has fully absorbed a 15 mln euro credit line from KfW which has funded 569 investment projects worth 19.9 mln euro. Interview - Sixty Percent of Bulgarians Keep Savings in Banks, Says Societe Generale Expressbank Saving Products Manager Anna Koedjikova. Competition on the Bulgarian saving products market is intensifying all the time bringing a wider range and a higher return for customers. On the other hand, Bulgarians are improving their financial awareness and tightening their requirements for banking products. Thirdly, the growing living standard, the high confidence in the banking system and the rapid growth of client numbers are giving a boost and deposits. Customers have been lately withdrawing from some riskier alternative investment products such as real estate and the stock exchange. This has helped household deposits gain some 30 pct in the year to March 2008. Therefore the Bulgarian market offers more potential for attracting people s savings. Bulgarians keep some 60 pct of their savings in banks compared to only 25 pct for the other EU countries. This will increase the popular mutual funds, insurance and pension insurance. The tight reserve requirement imposed by the central bank is also impacting on the market. Source: Dnevnik, PIX Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our Weekly Reports Enter your E-mail to receive our Daily Reports ShareThis

The divergence of the currency structure of bank assets and liabilities is now almost complete, the three-month statistics of central bank BNB show. Municipal bank has the largest volume of assets attracted in levs, followed by CCB and DSK Bank. DSK Bank, ProCredit Bank and Encouragement Bank gave out the bulk of the lev-denominated loans. Savers are in the most advantageous position at the moment since interest rates of deposits in levs are growing faster than those in other countries. Many banks fail to balance the currency in assets and liabilities, experts say. Source: Cash, P35 Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our Weekly Reports Enter your E-mail to receive our Daily Reports ShareThis

The growth of the Bulgarian banking sector is fueled by increasing mortgage loans, showed a report of research company RNCOS. Over one-third of the loans Bulgarian banks gave out in 2006 were spent on home purchases. Mortgage lending is seen swelling by 88 pct in the period 2007 to 2010. From 2005 to 2006 it surged 87 pct due to the market liberalisation and the low interest rates. PR Minds explained. The Bulgarian housing sector has been thriving in the past years as banks offer numerous housing loan opportunities. The property sector generated over 40 pct of the foreign capital in Bulgaria. In 2007 it attracted 26 pct more investments than the previous year. The steady pace will keep up through 2008, according to RNCOS. Source: Econ.bg Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our Weekly Reports Enter your E-mail to receive our Daily Reports ShareThis

The recent interest rate hikes did not intimidate Bulgarian individuals and firms and they borrowed 42.19 bln levs by May 2008, the central bank said. This is a 3.7 pct on the month and 55.2 pct on the year. The increase was 4.1 pct in April. Household lending swelled 48.8 pct on the year reaching 15.82 bln levs. Housing loans gained 55.2 pct. Bad loans made 2.2 pct of the segment versus 2.1 pct a year before. Meanwhile, German consultancy DTZ said the first phase pf the sub-prime mortgage crisis is over, under the most optimistic scenario. Source: Politika, P24 Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our Weekly Reports Enter your E-mail to receive our Daily Reports ShareThis

Bulgaria Property price for the first half of 2008 (1 EUR = 1.95 BGN) Please read Bulgaria Property Index, for important notes and facts. Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our Weekly Reports Enter your E-mail to receive our Daily Reports ShareThis

MKB Unionbank and DSK Bank will give a syndicated loan for the construction of Grand Mall, the biggest shopping center in the coastal city of Varna. The project will take in 129 mln euro. Source: Capital, P50 Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our Weekly Reports Enter your E-mail to receive our Daily Reports ShareThis

With the inflation hovering around us as much as 15 pct, there is no fund, deposit or another asset that does not promise a higher interest rate. Deposit interest rates are gliding up and banks are offering an annual return of 6.0 pct (with various strings attached). Shares on the Bulgarian Stock Exchange have been plunging for as long as nine months and the main indices are 40 pct below their peaks. The property market in Bulgaria is showing signs it would be more selective and experts do not write off the possibility for stagnation or even fall of the prices in certain segments. Financial experts themselves are at a loss as to what is best to invest in. Capital weekly invited some of the leading banks and brokerages to offer specific investment portfolios that can beat the inflation rate. The ECB recently raised it s key rate by 0.25 points to 4.25 pct for the first time since the start of the crisis. This is impacting on the Bulgarian banking market, where the race is tightening for resources are foreign parent companies are batting liquidity problems. The rates of euro-denominated loans and some 1.0 percentage point lower than those of local-currency loans. And yet neither is enough to cover the inflation. But for the crisis, the growth is giving the developing markets an edge. Most analysts agree that the emerging markets will suffer milder consequences from the crisis than the USA and the UK. For instance, Raiffeisen Capital Management, which runs 39 mln euro worth of assets, says the eurozone s GDP will slump to 1.7 pct and edge down to some 7.0 pct from last year in the emerging markets. Source: Capital, P12-13 Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our Weekly Reports Enter your E-mail to receive our Daily Reports ShareThis

The issue reviews Bank of the Year winners since 1991. Bulbank was named bank of the year first in 2000. It was ranked the biggest bank by market share in 2002, 2003 and 2004 and named the most efficient bank in 2004 and 2005. In early July Pari daily will award for an eleventh time in a row the top performing banks for 2007 in terms of market share, dynamics, efficiency, and client trust. The ranking is based on the financial reports of lenders. Source: Pari, B&F, P2-6 Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our Weekly Reports Enter your E-mail to receive our Daily Reports ShareThis

All banks that have given loans for SAPARD projects will be informed of the frozen amounts so that they know which installments will be delayed, Agriculture Fund head Atanas Kanchev said. Brussels stopped the funding under certain SAPARD measures ad also barred the budget from financing the contracted projects. Source: Telegraph (12/07), P5 Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our Weekly Reports Enter your E-mail to receive our Daily Reports ShareThis

Raiffeisenbank (Bulgaria) raised its equity capital by 97.8 mln levs to 407.9 mln levs. The bank issued 97.8 million shares with per value of 1.0 levs each. The assets of Raiffeisenbank gained 57 pct to 6.3 bln levs in first-quarter 2008 slicing 10.63 pct off the market. The loan portfolio totaled 2.2 bln levs. Deposits from firms and individuals gained 55.37 pct to 3.8 bln levs. After-tax profit stood at 34.41 mln levs, up by over 104 pct. Raiffeisenbank added seven offices to its 150-strong local network. The lender has a headcount of over 3,200. (Note: All figures/comparisons are for Q1 2008/q1 2007.) Source: Monitor, P15 Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our Weekly Reports Enter your E-mail to receive our Daily Reports ShareThis

The net interest income of Bulgarian-American Credit Bank (BACB) grew by 31.5 pct in first-half 2008 reaching 20.42 mln levs, the lender s consolidated report showed. The bank s executive director Stoyan Dinchiiski explained the results with businesses continuing need for loans to finance expansion. Yet he admitted that the performance was affected by the global crisis. Net interest income grew 44.7 pct year-on-year in 2007. BACB posted a 30.96 mln levs net profit, up 25.4 pct compared to 62.3 pct for the same period last year due to the tighter lending standards. Investors Get 1.50 Levs Dividend a Share The shareholders are BACB voted a dividend payout of 1.50 levs a stock. A total of 18.937 mln levs were slated for bonuses. The remainder was retained. Comments Despite the global crisis, Bulgarian banks are reporting good results and BACB makes no exception, said Razvigor Hristov of KD Securities. The CEE banking sector is one of the best performers in the world and will not be directly affected by the crisis, said Konstantin Abrashev of BenchMark Asset Management. The Bulgarian banking system will maintain its stability and achieve better return than the other European countries. BACB s second-quarter report is a proof. The Bulgarian banks were not directly affected by the global crisis because they do not invest in subprime mortgages, said Stefan Angelov of Varchev Finance. Source: Pari, P12-13 ShareThis

Prices in South East UK with coefficient 100 are taken as a base point in making this comparative analysis. Using this scale Bulgaria has coefficient between 25 and 40. With slightly bigger coefficient are countries like Hungary, Slovakia, Serbia, Portugal and Latvia. The most expensive construction is in Denmark, following by Switzerland, Ireland and Sweden. The fifth most expensive place for construction is United Kingdom; following by Germany .Construction in UK is 2.5 times more expensive than in Eastern Europe. Using the same scale the construction in USA have coefficient between 45 and 85, which is similar to Turkey. Construction cost by countries: Denmark (most expensive) Switzerland Ireland Sweden UK Germany ………… ………… ……… . ………… Latvia Portugal Serbia Slovakia Hungary Bulgaria (cheapest) Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our Weekly Reports Enter your E-mail to receive our Daily Reports ShareThis

Corporate profits will follow the economic slowdown in the USA in the coming months, forecast Raiffeisen Capital Management. The analysts said that the turbulent markets will drive American stocks to new bottoms. Source: Pari, P19 Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our Weekly Reports Enter your E-mail to receive our Daily Reports ShareThis

The assets of non-banking financial brokerages fell by 20 pct to 6.1 mln levs for the first three months of 2008, under official information. Net assets of pension insurance funds decreased to 2.28 mln levs from 2.32 by December 2007. Source: Investor.bg Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our FREE Weekly Reports Enter your E-mail to receive our FREE Daily Reports ShareThis

A national trade show of Russian companies will run from October 8 to 12, 2008 in Inter Expo Center in Sofia. The event aims to bolster trade cooperation between Bulgaria and Russia in energy, chemical industry, health care, education and banking. Source: Pari, P30 Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our FREE Weekly Reports Enter your E-mail to receive our FREE Daily Reports ShareThis

Bulgarian deputy PM Meglena Plugchieva and state fund Agriculture head Atanas Kanchev will ask banks to spare farmers and not rush them to repay loans for SAPARD projects after the EU froze the funding. Source: Standart, P10 Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our FREE Weekly Reports Enter your E-mail to receive our FREE Daily Reports ShareThis

Loan interest rates will continue to grow although at a small step as market competition is tightening. The inflation forcing Europe s central banks to hike rates will also play a part in Bulgaria, according to the latest Economic Review of the central bank. Lending growth will keep quick by the end of 2008 but slow down to 40 pct year-on-year in the winter as loan interest rates will move further up. The central bank sees the inflation rates easing to 8.0 pct for the year from the record 14 pct in May. A major factor was the 25 pct rise in food prices as well as the soaring fuel bills inflated by the exorbitant levels on the global markets. The inflation will calm down thanks to the good crop, which will boost food supply, and the expected fall in oil prices to some $130 a barrel. The economy will grow by over 6.0 pct. Foreign direct investments were 1.2 bln euro from January to April and are expected to keep the level. Source: Dnevnik, PVII Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our FREE Weekly Reports ShareThis

The advisor on the sale of Sofia s 70 pct stake in Municipal Bank, recommended a price of 100 mln euro, a source speaking under terms of confidentiality told Dnevnik daily. The Sofia city council hired the consortium Arhil - Kambourov - Transacta - Moore Stephens Bulmar to consult the deal. Local news outlet Mediapool.bg reported last week that the municipality will ask for110 mln euro. The website said mayor Boyko Borisov would turn a blind eye to the estimated market value of the bank. The final decision is due at the July 25 session of the council, said deputy mayor Minko Gerdjikov. He added that talk will start with the minority shareholder over his 25.6pct stake once the privatisation strategy has been approved. Local business tycoon Hristo Kovachki holds a blocking quota as decisions on the bank need a majority of 75 pct plus one vote. The municipality and its subsidiaries hold a 74.4 pct stake. Municipal Bank processes over 1.0 bln levs worth of municipal money, said Gerdjikov. Source : Econ.bg Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our FREE Weekly Reports ShareThis

Many Bulgarian banks used to turn to their parent companies anytime they needed fresh cash. But things changed last year when the bubble burst with sick U.S. hybrid instruments. As a result, banks started raising cash from the population. Deposits interest rates went to the skies, some of them offering double-digit annual returns. The daily turnover in the banking system fell in each of the past four weeks as LEONIA rose. High deposit interest rates rates are bad for the economy because they encourage people to save instead of spend. The smaller consumption will force companies to shrink output. In addition, the price of the bank loans they need will go up. A way out is easing the reserve requirement to 8.0 or 10 pct from the current 12 pct. This would feed banks with 1.0 to 2.0 bln levs. Source: Pari, P2 Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our FREE Weekly Reports ShareThis

Bulgarian banks are likely to put ff until end-2008 the loans of farmers with SAPARD projects, bankers told Sega daily after meeting with Agriculture Fund head Atanas Kanchev. Kanchev will talk with every bank that has funded SAPARD projects. Banks, on their part, will give the fund a list of the exact projects and amounts. Even if Bulgaria loses all of the frozen some 250 mln levs, banks would not be severely affected as this makes less that 1.0 pct of their loan portfolios, a banker commented. Source: Sega (12/07), P6 Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our FREE Weekly Reports ShareThis

The average loan in Bulgaria swelled 44.33 pct in first-half 2008 to 44,886 euro largely driven by soaring property prices, Credit Center said. The data is a positive sign amidst the global crisis, commented CreditCenter executive director Tihomir Toshev. Mortgage lending was the strongest segment. The nervous markets prompted local lenders to perform two loan interest rate hikes over the past year. The rate on euro-denominated loans moved to 6.4 pct to 7.25 pct from 6.50-6.15 pct. It grew to 7.4 pct to 8.0 pct from 6.5 pct - 7.0 pct on standard local currency loans. Some lenders halved their loans fees while others added the same amount. Others kept the charges intact. A large number of borrowers refuse to sign loan contracts due to the high property prices and the possible interest rate hikes. The average loan borrower takes 30,000 to 50,000 euro for 25 years and has a monthly income of 500 to 1,000 levs. Source: Monitor, P15 Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our FREE Weekly Reports ShareThis

Bulgarian banks will lend farmers money to feed their cattle provided they secure the loans with property, former bank association chair Levon Hampartzoumian told the Bulgarian National Radio. The banker explained lenders will have to cut their profits to give loans. Agriculture Fund head Atanas Kanchev said all banks that agree to fund farmers will be told the exact amount of funding frozen under the EU s SAPARD program. Source: Novinar (12/07), P4 Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our FREE Weekly Reports ShareThis

The fond markets reacted unanimously with the decline. The European Central Bank raised the interests from 4 pct to 4.25 pct, in order to cope with the galloping inflation in the 15 countries in the eurozone. For the first time in the last year and a half the leading monetary industry undertook an expansive policy. That is the highest interest per cent in seven years. According to a large part of the leading financiers these actions will further delay the growth of the countries in The Old Continent. Bourse The decision of the European Central Bank didn t surprise the markets, as the main stock exchange indices in Europe registered mass declines. The descending tone of the trade was started by Wallstreet Wednesday afternoon, when the indices plummeted. According to US brokers the drop of the stocks is a signal for the ascending market and in the next months we will become witnesses of the free fall of the indices. Support for the market may only be expected if good results come out of the state s economy. Localy The Bulgarian stock exchange market also couldn t escape from the negative trend and the four indices turned red, when the biggest loser for the day was Sofix. The correlation between our bourse and the developed markets is still minimal, brokers commented. Our capital market is connected more with Europe that with the USA. That s logical, after we are now in the EU, and most of our export is for Europe. The state interest crisis reached Europe, but in a much lower degree, and the echo in Bulgaria is minimal, according to brokers. Position According to the chief of the global markets in Deutsche Bank Anschue Jane, the interest crisis erased over a fifth of the value of the prices of stock s owned by banks, which is nearly USD 200 bln. The happening is very much like the consequences of hurricane Andrew to the insurance sector and the attack on 09.11.01. American banks have so far written-off USD 400 bln worth of assets. It became clear yesterday that the Swiss bank UBS may write-off another USD 7 bln. Source: Pari Daily Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our FREE Weekly Reports ShareThis

Bulgaria s Council of Ministers voted to add 50 mln levs to the capital of Bulgarian Development Bank (BBD). The state will buy 500,000 shares with a par value of 100 levs each . The lender s capital will be 89 mln levs. BBD was created by a special law in April pout of the former Encouragement Bank. The bank will have a national guarantee fund and a capital investments fund to boost exports by helping businesses. Source: Capital, P50 Be FIRST, get all the latest NEWS about Bulgaria Property Market! Enter your E-mail to receive our FREE Weekly Reports ShareThis